Thursday, January 05, 2012

In Re Marriage of Sorge (Cal. Ct. App. - Jan. 5, 2012)

In the red corner, we have Maryanne Sorge. In the blue corner, we have Joseph Sorge. Maryanne and Joseph were married, but are now divorced.

Pursuant to their divorce settlement, they split up the money in various ways, and Joseph agreed to pay Maryanne specified child support and alimony. Then, in 2007, Maryanne moved to modify the deal and get more money. They had three children, but only one of them is still a minor. He's 14.

Maryanne has no debt. She has over $13 million in assets. Half that amount is liquid. She's currently getting around $50,000 a year in child support for the one child, and she also gets alimony of about $150,000 a year. That was the the deal the parties struck. She wants more: She now wants over $200,000 a year in child support. Plus attorney's fees. Plus sanctions. Plus pendente lite attorney's fees. She has remarried, but doesn't want so say how much her new spouse makes.

Not especially sympathetic. Even down here in San Diego.

But that's equally true -- if not more so -- for Joseph. He sold his company for $100 million, and says he still has assets worth nearly $70 million, of which over $50 million are "easily" liquid. So he's got even more than his ex-wife. But doesn't want to pay more in child support, even after selling his company for boatloads of cash. His primary argument is that his "income" is negative because he's invested a ton of money in start-up companies that aren't making any money yet, and counts all those investments as "business losses" and thus deductible from his yearly income. Never mind that he's only spending that money because he expects to make even more money in the future.

But when he makes the money, the kid will no longer be a minor, so it won't be counted as income for purposes of child support. For now, he wants the losses to be counted so he doesn't have to pay more.

Oh, and he's sort of a jerk in the litigation. Threatening to sue court-appointed experts and the like. Both sides have aggressive and incredibly high-priced counsel. Hence the requests for six-figure sanctions and attorney's fee awards.

I somewhat feel the same way I feel when I watch, say, the New York Giants play the Dallas Cowboys. As a Washington Redskins fan, I don't really want either team to win. But someone has to. That's the nature of the game. So too here. With the only difference being that in divorce court, you can't simply watch and root for injuries.

Ultimately, the Court of Appeal largely agrees with Maryanne. Joseph says his losses have to be counted, but Justice Aaron says -- rightly, in my view -- that you're not allowed to structure your income to hose your child. Joseph could have invested the assets in regular old stocks or bonds and gotten current income, but decided not to. That's his call, of course. But it doesn't reduce his child support liability. The trial court can properly impute income, as it essentially did here.

Maryanne also wins on the pendente lite order. She says that she needs $60,000 now -- from Joseph -- in order to pay her attorneys for their response to Joseph's appeal. Note the not-significant fee she's paying her lawyers for a single brief. Joseph responds that she hardly needs $60,000 from Joseph now since she's got over $13 million in assets. Just write 'em a check! No need for it to come from Joseph at this point. That's not "need," but rather greed.

This issue is closer, in my view. But in the end I think that Justice Aaron is correct. Need is relative, not absolute. (So too, I might add, is wealth.) Especially here. Sure, Maryanne can pay. But Joseph can pay even more easily. So the trial court, balancing the equities, can properly tell the former to do so now. It's not necessary to wait until the end. It's so much easier for Joseph to write a check than for Maryanne to do so -- even though it's within both of their skill sets -- that it's okay to tell the former to go ahead and do it.

So that's how high-priced divorces sometimes go. Someone wins. Someone loses. And we occasionally get to watch the sausage being made.